An E&E Special Report

GULF SPILL:

Maker of controversial dispersant using top lobbyists

Anne C. Mulkern, E&E reporter

Greenwire: Friday, June 25, 2010

As questions build about the dispersant being used on the Gulf of Mexico oil spill, the company that makes that chemical mixture has well-connected lobbyists helping handle inquiries from U.S. EPA and Congress.

Illinois-based Nalco Co., manufacturer of dispersant Corexit 9500, recently hired Ramola Musante to run the company's Washington lobbying effort. Musante previously worked at both EPA and the Department of Energy. Nalco also recruited Ogilvy Government Relations, whose lobbyists include Drew Maloney, past assistant to former House Majority Whip Tom Delay (R-Texas).

The chemical company brought on those lobbyists in March and April to talk to lawmakers about potential environmental regulations. But Nalco now faces a host of new concerns because of its tie to the oil spill cleanup.

"As events have unfolded, having already re-established our government relations presence has made it easier for us to interact with the regulatory agencies on the Hill, which we would not have had the ability to do earlier this year," said Nalco spokesman Charlie Pajor.

Lobbyists working for Nalco are "familiar with people at the agencies," Pajor said. "They know the right people who are dealing with particular issues. Knowing who to talk to in dealing with any government agency is always quite helpful."

The oil spill thrust Nalco into the limelight because the company responsible for the disaster, BP PLC, crafted a response plan calling for use of the Corexit dispersant.

Environmental groups quickly pressured Nalco to reveal what the chemical compound contains. Scientists began warning that massive use of dispersants could create unknown risks to human and marine health. And EPA and the U.S. Coast Guard have ordered BP to stop using dispersants on the water's surface except "in rare cases."

Lawmakers have demanded more information about the dispersants, which still are being used on the Gulf's surface Greenwire, June 24).

Rep. Ed Markey (D-Mass.), who chairs the House Select Committee on Energy Independence and Global Warming, yesterday asked Coast Guard Adm. Thad Allen and EPA Administrator Lisa Jackson about the continued use of dispersants on the Gulf's surface despite the EPA and Coast Guard directive to limit that practice (E&ENews PM, June 24).

Having lobbyists on board could be very important for Nalco, said Jeff Holmstead, a lobbyist at Bracewell & Giuliani who worked as EPA air chief during the George W. Bush administration.

"Within EPA as an institution they have many, many different statutory authorities," Holmstead said. "Certainly if EPA decides to focus on you as a company, they have a lot of leverage.

"If it looks like EPA is serious about focusing on you, you're wise to make sure you're taking that seriously and that you have people who can explain your position to other parts of the administration and the Hill," Holmstead added.

More questions about ingredients

Nalco already has released which chemicals Corexit contains in response to questions from EPA. But environmentalists and some scientists believe more information is needed.

"The overall fact the huge amounts of dispersant are being used in unprecedented ways, those are issues that BP is facing," said Richard Denison, biochemist and senior scientist at the Environmental Defense Fund. "The questions about the specific degree of testing and safety of the dispersant is really falling more to Nalco."

Denison argues that the company should also reveal the amount of each chemical in the product. Nalco considers that a trade secret.

"We're dealing with a massive use of these," Denison said. "The public health and environmental needs, I think, outweigh the needs of Nalco in this case."

Nalco said that it has given the formula information to EPA, Louisiana officials and to those involved in the cleanup. As well, Pajor said, Nalco gave EPA permission to share the information with outside labs and has given samples to several colleges and universities for testing. The company has asked EPA not to reveal the information to the public, Pajor said, because competitors could then copy it.

"We clearly are giving [EPA] all of the information they need to monitor and test to protect public safety and the environment," Pajor said.

Denison said Nalco also needs to turn over all safety information it has about the product. Pajor said that the company has given EPA and other agencies all of the data it has.

Nalco already has sold $40 million worth of Corexit, according to Jeffries & Co Inc. analyst Laurence Alexander. The company stands to make $800,000 to $6.5 million per day from its dispersant sales, assuming a spill of roughly 200,000 to 1 million gallons a day, Alexander wrote in an advisory to investors (Greenwire, June 18).

Lobbyist issues

Nalco originally boosted its lobbying presence in Washington because it sees under the Obama administration the potential for greater environmental regulation, Pajor said.

"In a very regulation-driven business, depending on how those regulations turn out impacts our ability to be a successful business," Pajor said.

A large part of the company's business is water treatment. It also has a subsidiary, Nalco Mobotec, which provides engineering technologies to reduce air pollutants like sulfur dioxide, nitrogen oxide and particulate matter. It can sell those technologies to large business including mining operations, paper makers and food processors, Pajor said.

As EPA considers changes to air pollution regulations, Nalco would be affected, he said. Musante, who worked as a coordinator, special assistant, communications officer and analyst at EPA, is Nalco's new government relations manager. She has previously lobbied for power company Mirant Corp.

Beyond Maloney, other lobbyists at Ogilvy who are working for Nalco include Chris Giblin, who previously was chief of staff to Rep. John Carter (R-Texas), legislative director for Rep. Charlie Norwood (R-Ga.) and legislative assistant to Rep. Jack Fields (R-Texas).

While working for Norwood and Fields, Giblin "handled energy, environment, telecommunications and healthcare issues," before the Energy and Commerce Committee, according to his Ogilvy biography. Giblin also previously worked in the Washington office of Reliant Energy Inc., focusing on "crisis management related to the California electricity crisis of 2000," the Ogilvy biography said.

Nalco also has help from Ogilvy lobbyist Gordon Taylor, who worked as chief of staff and legislative director to Rep. Chris John (D-La.)